Its tenets are that averages discount everything, that markets have primary, secondary and minor trends, that a primary trend has accumulation, participation and distribution phases, that volume should confirm the trend, and that a trend is assumed intact until a clear reversal.
The confirmation tenet is the most distinctive: Dow argued that a move in the industrial average was only credible if the transportation average confirmed it, on the logic that goods made must also be shipped. That specific pairing makes less sense in a service and software economy, but the general idea survives in market-breadth analysis.
Dow Theory signals are slow by design, arriving well after turns. It is best understood as the origin of the trend concept in technical-analysis rather than as a system to trade today.
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